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Coconut grove beach resort

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TVM: How will you describe Coconut Grove Beach Resort?

CGBR: Coconut Grove Beach Resort is an indigenous owned hotel, which is a member of the Groupe Nduom. It is situated in the historical town of Elmina. The hotel is noted for its history and prominence.

Its initial concept was to provide a very comfortable accommodation and facility for travelers, rest and relaxation guests and tourists at large. It started with just 12 rooms and currently has 88 rooms. The Beach Resort has an upscale accommodation and other facilities that a 3-star hotel possesses and the Village has a contemporary African theme with a thatch roof etc.

The rooms all have facilities such as air condition, television, fridge etc. that provides the necessary comfort needed by a traveler. The Beach resort offers a picturesque view of unique indigenous nature that is very characteristic of an ideal location for a tourist or a traveler. The Beach resort has a restaurant that provides both local and continental dishes to satisfy the quest of all kinds of travelers (guests) that stop over or visit the facility.

The firm is managed by an indigenous team of hoteliers specialized in various fields– food and beverages etc. The firm adds a touch of international excellence to the Ghanaian hospitality industry. In as much as the firm recruits from within, it also considers people who have extensive experience from other countries and bring on board. So, Coconut Grove Beach Resort can be best described as the facility that provides “memories worth repeating”.

TVM: How long has Coconut Grove Beach Resort been operating?

CGBR: December 2016 will mark its 24th year of operation. It’s been both interesting and challenging though, in trying to identify what can make the memories worth repeating in the life of visitors. As a result, the firm has tried to ensure that it maintains a very good maintenance culture as well as improve on its services to achieve the said objective– “memories worth repeating”.

TVM: What makes Coconut Grove Beach Resort a more ‘defined’ Resort Centre?

CGBR: The hotel is traditionally exotic– A home away from home, describing a place as being a ‘home away from home’ can be a cliche at times, but a cliche does not stand the chance if it is true.

The structures at the resort are built with a traditional theme, set in modern architecture, which gives a conventionally exotic ambience. The variety of the resort’s service gives the impression that the facility was built with the client’s comfort, style and experience in mind. One distinct feature of a resort is an ocean and a beach that one can swim in.

CGBR is one of the few beaches along the coast line of Ghana. In the Central Region, where we are located, we have the best resort facility that allows our guests to use the beach to swim in.

For patrons who are a little bit hydrophobic, the Garden View Rooms, a blend of comfortable accommodation ranging from Standard rooms to Executive suites and VIP units. The facility also provides conference room, swimming pool and other recreational facilities which includes the Tennis court, the Basketball court, the gym, the Golf course– an 18-hole golf course.

This is the only beach resort in Ghana that has an 18-hole Golf course, so it’s uniqueness! One can combine golf with surfing in the ocean and that makes the facility unique among its contemporaries. Business executives (discerning people), across the globe these days, are meticulous of their health, rest and relaxation centres and wellbeing and hence, such a facility as this meets their requests.

Other activities such as horse riding, a visit to the animal sanctuary where we have Geese, peacocks, a fish pond, crocodile sanctuary, grass cutter sanctuary, piggery, poultry farm, etc. makes the facility a worthwhile destination for rest and relaxation. As a result of what we do, many a time, we are even compared with 5-star facilities even though we’re just a 3-star hotel. We don’t want to increase our star rating anytime soon but we shall continuously provide 5-star services.

TVM: What other features define and differentiate Coconut Grove Beach Resort?

CGBR: As part of satisfying our guests, we are considering enhancing our water sporting activities as well expanding to include some other interesting wellbeing facilities. At the moment we provide aerobics and yoga etc., but we’re looking at providing a sauna and so many interesting things in the very near future.

TVM: Why should one consider Coconut Grove Beach Resort as a first-point relaxation Centre and non-other when planning a vacation?

CGBR: The ultimate reason is clear. There is no place in West Africa that one can experience all these unique features at one-stop facility. Based on this uniqueness, CGBR believes it presents the best option for rest and relaxation guests as well as tourists. Despite all, CGBR is continuously expanding and improving on what it has because it doesn’t rest on its odds– it always looks at upgrading.

TVM: Who are some of the personalities that have patronized this facility?

CGBR: The facility is privileged to have hosted top personalities from across the globe. Some of such include the former President of the Republic of Ghana, President John Agyekum Kuffour who’s been patronizing the facility a lot, Dick Turner (the CNN Network Chief), Will Smith, Kofi Annan (the former UN Secretary General), Serena Williams, so many basketball stars etc., as well as other notable personalities just to name a few, all have spent some very interesting times here and CGBR appreciates them for choosing it on their stay in Ghana. This makes CGBR proud and it appreciates.

TVM: What room types are available to guests?

CGBR: As afore-mentioned, the facility has Beach resort and the village adjoined to provide a total of 88 rooms to the guests. The African Village which has accommodation for the budget-sized person or the NGO provides the family units which are 2 rooms en-suite with a living room area for a short stay while the Coconut Grove Beach Resort has the standard rooms– the single and double, the Executives suites.

TVM: Who is your target audience?

CGBR: The target audience of CGBR is “that discerning traveler” looking for rest and relaxation. In as much as it targets those looking for rest and relaxation, it also considers a wide category of persons ranging from NGO’s to students’ groups in colleges, from corporate institutions to individuals, couples getting wedded to newlyweds, tourists to stop-over travelers.

It looks at also attracting the very high profile clientele of which the Embassies, the High Commissioners and Diplomatic Corps, Expatriates etc. form part.

TVM: Every customer that comes here is expected to leave with an experience. How does Coconut Grove Beach Resort resolve its customer issues i.e. what is the customer service philosophy of the firm?

CGBR: As much as CGBR is trying to satisfy its clients by providing them with memories worth repeating, there are moments it encounters little issues which could range from technical to customer service. No matter the angle the issue may be from, CGBR ensures to resolve them with immediate effect. Business thrives on customers or clients, so irrespective of what the scenario or the case may be, CGBR always empathizes with the clients and understand where they’re coming from because they are valuable to its growth.

CGBR makes sure it reassures the clients that it’s not the norm for such scenario to occur and as such it will never repeat itself. CGBR also has the clients’ suggestion box where all such complaints are placed and collated for review.

It cherishes its clients comments and feedback whether good or bad, and most importantly when it’s bad, it gives CGBR more reason to pay attention and make sure it tries to understand the issue and prevent it from recurring.

TVM: Coconut Grove Beach Resort is touted not to be only interested in profit making but in contributing to societal development. What are some of your Corporate Social Responsibility feats?

CGBR: CGBR is proud to say it is a responsible corporate institution. As a responsible corporate institution that operates within a society, it is expected that it contributes to the development of such a society and that is exactly what CGBR does.

It gives back to the society. As part of its Corporate Social Responsibility activities, it has engaged in Health– blood donation exercises, screenings, Education– carrier counselling, training and development for tertiary institutions, for Primary and JSS schools, Cleaning and Sanitation exercises within the community, etc., as well as sports activities. It is even considering to provide Golf lessons for some of the schools within the community to encourage the students to take up the sport as a result of our facility– 18-hole course.

So for CSR, there’s quite a lot that has been done and it’ll continue to do more. It has also gone as far as helping students who need support.

TVM: Coconut Grove Beach Resort is known for its remarkable feats and have been acknowledged through the number of laurels achieved. What significance do these laurels play in the operations of the firms?

CGBR: Awards signifies successes. So once it is winning these awards, it tells that the firm is performing well and also goes on to show that its clients have faith in its operations. Also these achievements go on to show that the regulators see what the firm is doing and they realize it’s doing well and acknowledges it by rewarding it with these laurels.

But for CGBR, these laurels mean very little if it’s unable to do better than what it has done now. The laurels are forms of motivation to do better. Above all, these awards are very humbling and it’s important to give credit to those who make it possible: the staff, the owners and Directors of the investment as well as our numerous clients. Recently, CGBR won the award for being the best tax payer out of about 1000 hotels across the nation; it has won awards for being the most prompt and efficient tax payer by the Ghana Revenue Authority; the Tourism authority has acknowledged us, Hotel association has acknowledged etc.

The last couple of months have been monumental; almost all the major award schemes in Ghana are beginning to include a CSR component in their category, a result of consistent advocacy around social responsibility. In September, 2016, a program organized by Centre for CSR, West Africa and Integriti Media under the award name and identity-Ghana CSR Excellence Awards-GHACEA for which Coconut Grove Beach Resort emerged as the CSR Hospitality Organization of the Year.

TVM: Advice to industry players?

CGBR: I acknowledge we are in a tough industry– hospitality. The reason I say this is because we work 24/7 and as a result we are unable to have rest all in the name of providing our clients with a great experience.

CGBR plays a pivotal role in the life of a man as it fulfills Maslow’s theory of man’s important needs which are food, clothing and shelter. It’s incumbent on all stakeholders– the hoteliers to understand that we play a very key role in the needs of man.

It is important that we understand the significance we play in providing the enabling environment for guests who visit us so that we don’t probably lose them to travel oversees for holiday. We should make the industry appealing so people can actually take a holiday here in Ghana as supposed to spending their holidays outside the country.

We need to also pay critical attention to our customer services and ensure all those very basic things have been provided for our clients at the best that we can. For the stakeholders– regulators, we ask that they give us the enabling environment, even if it’s subsidies or the necessary support or the necessary partnerships, we need those because without them, we can’t thrive.

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Business Interview

Recapitalization– The panacea to the woes of Ghana’s insurance market? – Mr. Justice Yaw Ofori -Commissioner of Insurance, Ghana

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In a bid to ensure a robust Ghanaian insurance industry, the National Insurance Commission, NIC, has initiated moves towards recapitalization. The initiative, yet to be officially announced, involves a planned increase in the Minimum Capital Requirement (MCR) for insurance and re-insurance companies by over three (3) fold. The industry regulator has engaged stakeholders to ensure smooth implementation of the exercise which has seen financial analysts draw a parallel with that witnessed in the banking industry last year.

This has prompted questions- some comparative analysis with the banking one as well as questions about its economic significance. The Insurance Commissioner, Justice Yaw Ofori, in an interview with the Vaultz Magazine, gave a detailed explanation of the exercise.

 

State of the Ghanaian insurance sector

Ghana’s insurance industry has in recent years witnessed a significant growth especially in terms of the number of new entrants recorded. The industry however continues to record low insurance penetration which still hovers around 3%.

The Insurance Commissioner believes this among other issues highlight the need for the industry recapitalization.

I would say Ghana’s insurance industry is strong despite the challenges with respect to recapitalization. The market is still virgin and there are a lot of areas which are untapped and that is why we see foreign companies coming into Ghana to do business. The oil sector is booming and so is agriculture as well as inclusive insurance and all we need to do is to make sure companies are well capitalized so far as they want to operate in Ghana” Mr. Ofori stated.

According to the NIC’s annual report, Return on Equity (ROE) for insurance companies has consistently been less than the corresponding year’s prevailing treasury-bill rate with the overall picture worsening year on year especially for life insurance companies. Mr. Ofori attributes this to the tendency for investors to choose high-yielding financial instruments over insurance which is a relatively long-term investment option.

MR. JUSTICE YAW OFORI -Commissioner of Insurance

“I think it’s all because people get more returns when they invest their monies in T-Bills and other non-banking financial instruments.  For instance, there was a time people were promised 25% to 35% on their investment which was more attractive so they didn’t see why they should invest in other assets like insurance. So some insurance companies were consequently recording underwriting losses” he explained.

The insurance industry has been contributing significantly to Ghana’s economic growth– albeit constantly at less than 2% of GDP through the provision of long-term investment finance to the economy whilst influencing production and consumption, internal and international trade among others.

“Insurance is a vital pillar of every economy. In Ghana for instance, it contributes about GH¢ 5billion in terms of business generated annually. About 12, 500 people earn a living directly from the industry and many more indirectly such as lawyers, doctors, carpenters, masons, and mechanics. Without insurance you can’t get bank loans because they need some kind of guarantee that they can recoup their money in the event of default”.

 

Insurance recapitalization– the facts and figures

Following its engagement with stakeholders including brokers and shareholders alike, the NIC has proposed an increase in the Minimum Capital Requirement (MCR) for life and non-life insurance companies from the current GH¢ 15million (approximately US$ 3million) to GH¢ 50million approximately US$ 10million).

Re-insurance companies will also see their MCR reviewed upwards from GH¢ 40million (approximately US$ 8million) to GH¢ 125million (approximately US$ 25 million) while that of brokers will be increased from GH¢ 300,000 (approximately US$ 60,000) to GH¢ 500,000 (approximately US$ 100,000).

“We came about these figures by taking into consideration how much a company would need to break even and stay profitable. We realized it will take 4 to 6 years for a newly established insurance company to break even with GH¢ 50 to GH¢ 60 million capital” the Commissioner noted.

The last time the market underwent recapitalisation was in 2015 and this was pegged against the dollar with an initial plan of an annual increment which after a considered review, was implemented differently.

“On an annual basis, the minimum capital was supposed to be adjusted to reflect inflation but it has not been done for about 4 or 5 years. But even if we had those increments, the current minimum capital would have been around GH¢ 25million which is about half what we are proposing now because Ghana’s economy is not like it was about 10-15 years ago; it’s bigger now” he stated.

In 2017, about three (3) companies reportedly had challenges meeting the then minimum capital requirement of GH¢ 15million. Mr. Ofori confirmed this as a normal industry development.

“It’s always been so in every insurance industry. There are times that companies will have challenges meeting the minimum capital but that does not mean that it’s time to shut them down. We, as regulators, try as much as possible to encourage the shareholders to recapitalize because shutting down an insurance company is not an easy thing and it is the last thing a regulator wants to go through,” he disclosed.

 

The ultimate goal

The Insurance Commissioner reiterated that the purpose of the recapitalisation was to ultimately grow the industry to the benefit of the economy by protecting the interest of the policy holder.

“Following our stakeholder engagements, we’ve done our concept paper which has been reviewed by the board. We’ve explained to stakeholders, the rationale behind the calculation and of course not everybody is going to like it but at the end of the day, we want the best for the industry. The Commission is not interested in closing any entity but rather building a strong market that takes care of the interest of the policy holder,” Mr. Ofori stated.

“Our economy has also grown. The GH¢ 15million was implemented some years ago. Now we have the oil boom and the country is losing so much revenue, we are actually sending money out because our companies are not financially strong to take much of the risks,” he added.

“Over 90% of our risks have to be insured on the international market and these are some of the reasons our cedi is always affected by the dollar. There is more demand for the dollar than the cedi and this actually arises because we are sending these risks out which demands paying insurance premium in dollars. So, what we are trying to do is, we want everyone to increase their intake. The more absorption they can take, the less flight of insurance premium,” the Commissioner asserted.

He also defended the proposed 300% increase in the capital requirement as crucial in stimulating the desired growth.

 

Correlation with the banking crisis and recapitalisation

The NIC has already indicated the banking crisis and recapitalisation somewhat delayed its planned exercise in the insurance sector. This, according to the Commission is because banks were already looking for capital from the same market the insurance companies will be considering to recapitalize.

A recapitalisation directive in the insurance sector would have thus led to competition between banks and insurers in raising capital– making it a lot more difficult for both entities.

With the bank recapitalisation now over, analysts believe the way has now been paved for a similar exercise in the insurance sector. The Insurance Commissioner confirmed this assertion citing the banking crisis as a major factor affecting insurance recapitalisation efforts in 2017 which almost led to the collapse of about three (3) companies.

 “When we assess an insurance company, we don’t look at only the minimum capital but the totality of the risk that it carries. So GH¢ 15million is the minimum but we have companies worth over GH¢ 200million. So if you are worth over GH¢ 200million and you have risk of let’s say GH¢ 600million and you cannot pay your claims on time, it is a challenge despite meeting the minimum requirement. And most of the challenges some of our companies are facing are linked to the banking crisis because they have monies with these banks and they cannot access these monies,” he added.

The Insurance Commissioner also dismissed assertions that the insurance recapitalisation is a mere replication of that witnessed in the banking sector and states that the two exercises are mutually exclusive.

 

“No it’s not a replication for the fun of it. Everything is interconnected. Even some individuals have lost their monies because some of these banks have been consolidated. When such entities go under, it affects everybody. When insurance companies make their monies, these monies are kept in the bank for investment in the economy. Insurance companies go for those monies when there are claims or a need for it. Now we have an insurance company going to the bank and the bank has no money. Although on paper they have monies, once it’s inaccessible, it cannot be considered– affecting their Capital Adequacy Ratio,” he revealed.

This, according to the Commissioner, only makes a stronger case for the recapitalisation.

Meanwhile, banking and insurance operations are distinctly different with diverse inherent risks. Some analysts thus insist recapitalization may not necessarily be the way forward for addressing the woes of the insurance industry. Mr. Ofori however asserts, insurance companies even need more capital than banks.

 

Risk-Based Capital requirement

The NIC’s current regulatory approach is geared towards the global trend of Risk-Based Supervision framework and the Commission is still pursuing this approach by way of a Risk-Based Capital (RBC) requirement.

 

“The minimum capital requirement is also part of the risk-based framework because, that means, so much assets to absorb more risks. Risk-based means we’re looking at the totality of your portfolio to see the inherent risks and how we can manage them. It is a complex thing. Even though we asking for minimum capital, risk-based provisions will also come from it. When you suffer from malaria you don’t take only chloroquine. You add multivitamins and some pain killers to make you survive,” he illustrated.

 

Recapitalisation has always been used as a regulatory tool to check the financial soundness of the industry.  There is, however, an emerging school of thought that this is not as crucial as the regulator focusing on ensuring effective management of the capital of the companies by ensuring they maintain capital levels commensurate with their respective risks.

 

Mr. Ofori says all these complement each other in strengthening an industry.

“Even new companies entering the market are not allowed to start up with the GH¢ 15million which was the minimum but at least GH¢ 25million. We couldn’t ask for the GH¢ 50million and even with that, they are investing more.”

 

Local versus International standards

Internationally, capital is not necessarily used as the basis for assessing the strength of an insurance company as opposed to the company’s net worth– an assertion Mr. Ofori confirmed.

“In advanced countries, their capital requirement could be like that of Ghana or even less.      That doesn’t mean that the companies that applied for the license to operate insurance don’t have the capital backing. These companies know that insurance business is risky. So if the minimum capital required is US$ 3million, that company comes into the business with US$ 500million by way of net-worth.

When we say minimum like the GH¢ 50million, that money is not going to sit down doing nothing. It could be your businesses, assets and other investments. Insurance monies have to be working. So if you have an insurance company that owns apartments, it’s part of their total worth. When we assess your worth, we look at both your liquid cash and assets because an insurance company can have a chain of hotels which means it can take as much risks and when there is a problem, it can fall on them. The Aon’s, Allianz and CGI’s have big investments all over the world and when they have challenges, they know where to draw money from. So when we say minimum capital requirement, it is not only liquid cash but also investments in T-Bills and so on,” he further explained.

The MCR in the Pan-European Solvency RBC regime is only € 3.2million (approximately GH¢ 19million) for life and reinsurance companies and € 2.3million (approximately GH¢ 14million) for non-life insurance companies. Some analysts have in this light predicted Ghana may only end up being one of the over-capitalised industries in the world by end of the recapitalisation.

But Mr. Ofori is challenging such views insisting that the local insurance industry which is still a burgeoning one cannot be placed on a level pegging with such developed regimes when it comes to capital requirement.

The dollar equivalent of GH¢ 50million is about $ 10million or less depending on the exchange rate and other factors. Don’t forget the financial strength of those companies operating in those markets. One company is even worth more than all companies put together in Ghana. When we make reference to other places, Ghana is different. When you come to Ghana, the way people respond to work is different. Minimum capital has nothing to do with international best practices,” he emphasized.

Ghana is not the country with the highest minimum capital requirement in the world. There are African countries such as Kenya whose was higher than Ghana. We’ve done a lot of research. Kenya is about US$ 8million or so and in Ghana the GH¢ 50million which was supposed to be $10 million will probably come low depending on exchange rate and other things. Insurance is international and transnational and each company must be worth its weight in gold on the international risk market otherwise businesses coming from outside Ghana will not consider Ghanaians,” he elaborated.

 

Expected Outcomes

The Insurance Commissioner is confident the industry will respond positively to the exercise – citing special provisions to facilitate the process.

“If we should introduce the minimum capital, almost 50% of companies will meet it per our analysis. Looking at their portfolio, some of them qualify already, some with a little push will be there and a few may have challenges. But we will encourage them; that’s why we have transitional provisions.”

According to Mr. Ofori, the recapitalization is ultimately expected to reposition the insurance industry and the economy as whole on a stronger footing by addressing issues like low insurance penetration and undercutting.

“If you have a lot of companies on the market that are not financially strong, you will definitely have problems like undercutting because some of them are ready to sell for cheap. They take low premiums and when there is a loss, they are unable to pay. Strong companies have bad days but their account is so big and they are able to pay claims. So I think we’ll have a much disciplined market because minimum capital is not going to be easy. Recapitalisation will help eliminate undercutting because the more you undercut, the more it affects your minimum capital. So you’re going to do prudent underwriting”

In terms of the bigger picture by way of economic impact, he stated “I believe all in all, the industry can also retain much of their underwriting income and probably create more jobs. The more money we can create, more employment can be created, less monies leaving the country, our cedi might be more stable and the economic benefits are numerous”.

He also revealed a new bill is currently under consideration to complement the recapitalisation in addressing the longstanding challenge of low insurance penetration in Ghana.

“We’re working on a bill to make sure we can have more compulsory insurances. We are trying to make sure that these compulsory insurances will help boost the interest in insurance. We’re also increasing market conduct supervision to enable companies pay their claims on time. We’re providing a lot of insurance education to the industry and the general public. This year for example the Commission out of its own budget, through the Ghana Insurance College will train 10,000 Ghanaian youth as insurance agents nationwide for free so that there will be a pool of agents from which the industry can always fall on to recruit. We’re also doing much with respect to the compulsory fire insurance; creating awareness that it is compulsory to have these kinds of insurances. So we’re doing all we can.”

Even though the recapitalisation in the banking industry led to consolidation of several banks and lay-offs, Mr. Ofori believes the final narrative in the insurance sector may not necessarily be the same– allaying such concerns of concomitant job losses as a result of companies failing to meet the capital requirement.

With the banking recapitalisation, some banks were affected. We don’t want to have those challenges. We don’t want the companies to go under. Much as we want the minimum capital to go up, we want to do it in such a way that we move along with everybody,” he concluded.

 

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